Consent EconomicsPosted: May 9, 2012 | |
I’d like to tell you about a new economic system that I call “Consent Economics”. It’s an alternative to our current economic system, and its purpose is to give us a way to decide how important stuff like food, work, fossil fuels, and anything else, should be divided up.
Consent Economics is based on the idea of a Market: a place where people who have something they want to sell can meet people who might want to buy it, and negotiate a price that both are satisfied with.
A Market can be a literal real-life market, where people display their wares to potential customers, or it can be an abstraction: for instance, the buyer and seller might negotiate a price online, without ever meeting each-other. The buyers and sellers might not be individual people, but organisations acting on behalf of thousands of people who don’t have time to carry out negatiations individually.
So far Consent Economics sounds a lot like regular Economics, but there is one crucial difference: every transaction in Consent Economics, happens with the consent of everyone involved.
To show what an economic system based on consent would look like, it’s useful to look at the ways in which the regular economic system we have now isn’t based on consent. At first glance it seems pretty consensual: when you go to the shop you can choose to purchase any product you want; no-one forces you to buy brussel sprouts if you’d rather have frozen pizza. And it’s your choice to go to the shop at all – if you wish, you could go to a different shop instead, or order your groceries online.
But what if you didn’t have any money? What if the products were over-priced? You might not think it’s reasonable for you to go hungry when you can see food right there in the shop, but to the police doesn’t matter whether you think it’s reasonable or not – if you take something without paying, you risk being arrested and imprisoned. Every aspect of our current economic system is backed up by this threat. In fact, while the police are supposed to be there to protect and serve people, in reality they spend most of their time dealing with crimes against property.
Taking a global view, there are tremendous inequalities in the way things like food, fuel, and work are distributed. Many of the people in the poorer countries do not think this is reasonable. They naturally want a better life for themselves and their families, and would therefore travel to one of the wealthier countries if they could, but they are blocked by border controls and threatened by immigration police.
Even looking at people who are financially well off, who genuinely find the economic transactions they take part in to be reasonable and favourable, the consent they give is not fully informed consent, because we are not allowed to know about the transactions we take part in. When we buy strawberries from Kenya we have no way of finding out how much the workers who cultivated them were paid, or under what conditions they worked. This isn’t an accident: companies go to great lengths to make sure that this information isn’t available.
So the current economic system is held together by police, prisons, border controls, and secrecy. By contrast, a Consent Economy does not need any of these things to hold it together; it is held together entirely by the consent of every person who participates in it.
But this couldn’t possibly work!
I’m going to work through some objections that immediately come to mind:
a) Human nature: It isn’t possible for people to arrange their lives in a way that everyone is happy with, because it is human nature for people to compete, to be aggressive, to loot and pillage.
Response: Humans are very good at adapting to different situations, and “human nature” is a lot more flexible than we tend to think.
b) A society without police would quickly descend into a nightmarish orgy of violence, with the strong preying upon the weak.
– Many crimes are committed by people from the margins of society – in a more equal society there would be far less crime. If all the police in your town magically disappeared tomorrow, would you go on a rampage?
– Some types of violence are widespread in our society: child abuse, domestic violence, and sexual assault. These happen in every section of society. I’m not going to deal with how these could be addressed, except to point out that in our current system we do a terrible job of this, with the vast majority of these crimes going unpunished. One possible response to this kind of violence would be to have a police force that responds to crimes of violence against people, but not to property crimes.
c) Rational actors: mainstream economic theory says that people are “rational actors” who will always act so as to get as much money for themselves as possible, even if it means trampling over others. This doesn’t fit with the idea that all transactions should be based on consent.
Response: obviously people don’t just care about money, but there is a grain of truth to this; people usually act in what they consider to be their own interests. People would only respect a requirement for consent in economic transactions, if they thought it was in their own interests to do so. More on this later.
If a Consent Economy did exist, what would it be like?
So far I haven’t said much about what a Consent Economy would be like. The only requirements are that it is based on markets, that every transaction is built on consent, and that it does not need police, prisons, border controls, or secrecy, to hold it together. Based on these requirements we make some guesses about what it would be like.
The fact that there is no need for police and prisons shows that there is no underclass, no group of people who feel excluded from society. This, along with the fact that no-one would freely participate in a system that disadvantaged them, points to the fact that a Consent Economy could only exist in a relatively egalitarian society, with little divide between rich and poor. If we presume that the amount of stuff produced in a Consent Economy would be roughly the same as the amount produced now, the vast majority of people would be better off living in a Consent Economy.
Furthermore, while the current economic system is quite efficient at producing lots of stuff, it is horribly inefficient at producing things that people actually need or want. We have yachts and skyscrapers and beer gardens with outdoor heating, but we haven’t yet managed to inoculate all the world’s children against common diseases, or even to feed them. Trucks drive past each-other in opposite directions, transporting near-identical products, while billions are spent on advertising to convince the relatively affluent to want what the corporations produce. There are entire industries whose purpose is not to satisfy people’s needs and desires, but to move money from individuals to corporations.
These ridiculous imbalances are only possible in a system where people don’t know what’s going on, and don’t freely consent to the transactions they take part in.
On the stability of a Consent Economy
Let’s take another look at the knee-jerk idea that a Consent Economy wouldn’t work because people would immediately try to subvert it. Some people would lie or manipulate others in order to get a better life for themselves, at other people’s expense. Some people would try to take stuff from others using violence instead of negotiating a deal that both parties would freely consent to.
Furthermore, there would undoubtedly be endless arguments as people tried to negotiate transactions in free, unpoliced markets. Some people would be better negotiators than others, and in all likelihood some people would end up agreeing to deals that disadvantaged them, simply because it was easier to just accept the bad deal than to keep argueing about it. There’s nothing in the idea of a Consent Economy that guarantees absolute fairness (and it would be hard to even define what is meant by ‘fairness’). However the Consent Economy does put a limit on the amount of unfairness, since if the deal on offer was really bad, no-one would consent to it.
Suppose Alice and Bob both go to the market. Alice wants to pay a low price for Bob’s widgets. Bob doesn’t agree, but it turns out that Alice has made a sneaky deal with all the other widget-buyers in the district to insist on a low price. Bob’s in a bad position; he needs to sell his widgets or he’ll go hungry.
In Regular Economics, at this point Bob has no choice other than to accept the new, lower price. As time goes on Alice and her cartel gain even more wealth and power, which they use to force Bob and others like him to agree to worse and worse deals, until before you know it Bob’s working 60 hours a week and still not earning enough to live on.
In the Consent Economy though, when Bob realises that no-one is going to offer him a decent price for his widgets, he starts hollering, right there in the market.
People gather round to see what all the commotion is about, and Bob tells them that no-one is offering a reasonable price for his widgets. The people start thinking to themselves: “If Alice and her cartel screw Bob over, they’ll have even more money and power. They might screw me over next. The whole Consent Economy could fall apart, leading to a dystopian nightmare.” The people put pressure on Alice to offer Bob a price that they consider to be reasonable.
People are rational actors – they do what’s in their own best interests – and they know that they are much better off with the Consent Economy than without it. This motivates people to protect the Consent Economy. So while it’s true that people are continually trying to subvert the Consent Economy, there are also many more people perpetually ready to defend it.
Finally, it isn’t possible for me to describe exactly what a Consent Economy would look like, because that isn’t the way a Consent Economy would be developed. It would not be devised by one person or by a small group of people, it would have to be developed by large numbers of people working together. When we have developed the tools and skills needed to carry out that kind of large-scale non-hierarchical co-operation, we will have taken a step toward developing the tools and skills needed to run a Consent Economy.